1. BAF3M September 3 2014 Unit 1 : Accounting and Business

2. Industrial Revolution

3.  In the past, traditionally, owner = manager, meaning owner owns and manages the small business.  The Industrial Revolution was the transition to new manufacturing processes in the period from about 1760 to 1840.  Industrial Revolution caused people to start doing mass production.  Since the industrial revolution occurred, businesses are getting big. Big businesses are called corporation. History of Accounting

4.  Kings and lords would buy the big machines, but they did not want to work for the business. They still wanted to keep their job of a “king” or “lord”.  Owner (or investors) and manager are now separated due to Industrial Revolution.  Kings and lords would pay big salary for hiring managers and technicians. History of Accounting

5.  The owners (kings and lords) would want to periodically check on whether the business is making big profit for the investors. (or whether the manager is doing a good job)  The investors would ask the manager to record all business transactions and summarize the records so that investors can check and verify that employees are doing a good job. History of Accounting

6.  Gathering financial information about activities of a business (Lawyers)  Preparing and collecting permanent records of a business (Accountants)  Rearranging, summarizing and classifying financial information (Accountants) What is Accounting?

7.  Preparing financial reports and summaries for the following purposes: To help management making decisions (CEO) To help bankers and investor’s making decisions. (Bankers) To measure profitability of a business (Business owners)  Establishing internal control system to promote accuracy and honesty among employees. What is Accounting?

8.  You will have the rest of today’s class and tomorrow’s class to work on the first assignment of this class. Class Activity